Pace Energy and Climate Center Releases Study on Impact of July 2006 Con Edison Power Outage in Western Queens

In July of 2006, the lights went out in western Queens in an extended electrical outage that continued over nine days. Everyone knows that a power outage is inconvenient; but a new study released by the Pace Energy and Climate Center reveals in specific detail just how severe the consequences can be, particularly if the outage occurs during a summer heat wave.

FOR IMMEDIATE RELEASE

PACE ENERGY AND CLIMATE CENTER RELEASES STUDY ON IMPACT OF JULY 2006 CON EDISON POWER OUTAGE IN WESTERN QUEENS

Findings reflect issues other cities may face if systems fail

Commentators call for change in reimbursement law

WHITE PLAINS, NY, July 16, 2010 – Four years ago tomorrow, the lights went out in western Queens in an extended electrical outage that continued over nine days.

Everyone knows a power outage is inconvenient; but a new study reveals in specific detail just how severe the consequences can be, particularly during a summer heat wave.

Earlier this year, the Pace Energy and Climate Center (Pace) and partnering organizations released the findings of a comprehensive study of the July 2006 electrical outages in Consolidated Edison’s Long Island City network. The survey is the first to measure both the economic and health impacts associated with extended electrical outages.

Settlement

The 2006 outage occurred from July 17 through July 25, and affected about 174,000 people in Western Queens (Sunnyside, Woodside, Long Island City, and Astoria). Following the outage, the New York State Public Service Commission, the state administrative agency that regulates New York’s investor-owned energy utilities, conducted a review of the events in a “prudence” investigation. After extensive settlement discussions, the active parties in that proceeding (including Con Edison, staff of the Department of Public Service, New York State Consumer Protection Board, the City Of New York, NYS Assemblyman Richard L. Brodsky, the Public Utility Law Project, and Western Queens Power for the People, a community group formed by residents of affected areas to seek restitution from the damage) reached agreement on a settlement that was approved by the PSC in July 2008.

As part of the agreement, Con Edison agreed to pay up to $500,000 to cover the costs of the study. The findings included:

Total outage-related losses were about $188 million, including losses of about $77 million incurred by residential customers and $111 million by business customers.

The major categories of losses for residential customers included spoiled food ($21.5 million), health and medical-related expenses ($7.3 million), housing-related costs ($19 million), and personal expenses like extra commuting time, dining out and lost wages ($29 million).

The $111 million in losses incurred by business customers includes $55.5 million in lost revenue. Con Edison provided reimbursement of about $5 million of the direct losses, leaving about $106 million in net losses for these customers.

In assessing possible disparities in the impacts of the power outage (including areas that may have been more acutely affected and certain groups or individuals who did not receive reimbursements from Con Edison), the study concluded that there were no significant differences in the impact of the outage and the level of reimbursement for the various demographic subgroups.

“Our study puts some numbers and personal testimony on how the loss of power adversely affects the daily lives of customers and businesses in an entire urban community,” Jamie Van Nostrand, the Executive Director of the Energy and Climate Center and manager of the study said.

“The kind of data utility companies compile do not capture the economic and health impacts that customers experience during an extended power outage,” he added.

Reimbursements

“This study shows that Con Edison reimbursement rates are inadequate,” said Patrick Barnhart on behalf of Western Queens Power for the People. “Power outages impose costs on affected communities that are millions of dollars more than are repaid, even after a lengthy public PSC investigation like the one we participated in.”

He said: “New York State laws and regulations need to be brought up to date to include the higher reimbursement rates that reflect the real costs of a power outage and the real costs of restitution to those who are affected by it. This study provides state legislators, elected officials and regulators with the evidence they need to make those urgently needed changes.”

Assemblyman Richard Brodsky stated, “I am proud of the administrative proceeding we brought to hold Con Edison accountable for its decisions leading up to the 2006 power outage in Queens. It was critical that Con Edison be held accountable for its negligent actions that brought unnecessary suffering and economic harm to residents and businesses.”

Survey methods

Pace partnered on customer surveys and data gathering with LaGuardia Community College, which has significant ties to the businesses and residents of the neighborhoods in the Long Island City grid area. Pace also retained a bio-statistician and econometrician, Dr. Haftan Eckholdt, to develop the sampling methodology to make sure the study is statistically valid. The project team surveyed 198 non-residential respondents (business owners or workers) and 1,993 residential respondents in face-to-face interviews, and conducted telephone interviews of 936 residential respondents.

One challenge, according to Van Nostrand, was providing a means to reflect some of the “intangible” impacts of the outage, such as the inconvenience and personal discomfort experienced due to the loss of lights and air conditioning during a summer heat wave. “We attempted to capture that through open-ended questions in the survey,” said Van Nostrand, “which gave the survey participants the chance to share their experiences. We included several narrative responses in the Final Report to reflect these ‘qualitative’ impacts.”

“Dead and Scary”

Here is one such narrative statement:

“I remember that during about the 2 weeks we used to refer to the bag of ice as your Sunnyside briefcase, and you’d come (home) through a city that was lit at night on your way home from work, and you’d get, you’d come around the corner of the number 7 train always hoping that your power would be back on. I was living by myself at the time, so I couldn’t check in with my family. And, I remember, just the sense of disappointment every night seeing that big field of darkness that was Sunnyside Gardens and walking back home in the dark; with the Con Ed crews were working on, all the time, but it was just, it was dispiriting getting off the subway every night and realizing that around you, the city had power and life was going on, and in our neighborhood everything was dead – and scary.”

The study also analyzed the health impacts of the outage, with hospitalizations and emergency room visits that were potentially heat-related classified by vulnerable age group, race, and ethnicity for each zip code. The vast majority of hospitalizations occurring during the outage were attributable to respiratory illnesses, and associated costs were nearly $500,000. In addition, the study examined transportation-related data, including bus service, subway ridership, traffic operations, and extra commuting costs.

The Pace Energy and Climate Center is an integral part of Pace Law School’s environmental law program, which U.S. News & World Report ranks as one of the nation’s top environmental law programs. For over 20 years, the Energy and Climate Center has been a leading multi-disciplinary organization in the areas of environmental research and advocacy on energy issues in New York and throughout the Northeast, while training law students in these areas.

Founded in 1976, Pace University School of Law has over 7,000 alumni throughout the country and the world and is consistently ranked among the nation’s top programs in environmental law. I t offers full- and part-time day and evening JD programs on its White Plains, NY, campus and offers the Master of Laws degree in Environmental Law, Sustainability Law and Comparative Legal Studies, and a Doctor of Laws in environmental law. The School of Law is part of Pace University, a comprehensive, independent, and diversified university with campuses in New York City and Westchester County. www.law.pace.edu.